Autodesk Reports Second Quarter Results

SAN RAFAEL, Calif.--(BUSINESS WIRE)--Autodesk, Inc. (NASDAQ:ADSK) today reported financial results for the second quarter of fiscal 2014.

Second Quarter Fiscal 2014

Revenue was $562 million, a decrease of 1 percent, compared to the second quarter of fiscal 2013 as reported and an increase of 2 percent on a constant currency basis.

GAAP operating margin was 15 percent, compared to 16 percent in the second quarter of fiscal 2013.

Non-GAAP operating margin decreased by approximately 100 basis points to 24 percent, compared with 25 percent in the second quarter of fiscal 2013. A reconciliation of GAAP to non-GAAP results is provided in the accompanying tables.

GAAP diluted earnings per share were $0.27, compared to $0.28 in the second quarter of fiscal 2013.

Non-GAAP diluted earnings per share were $0.45, compared to $0.48 in the second quarter of fiscal 2013.

Deferred revenue increased 7 percent to $806 million, compared to the second quarter of fiscal 2013.

Cash flow from operating activities was $65 million, compared to $107 million in the second quarter of fiscal 2013.

Our second quarter was marked by strength in our Architecture, Engineering and Construction (AEC) business segment and continued growth in suites, said Carl Bass, Autodesk president and CEO. Growth in these vital areas was offset by mixed contributions from other parts of the business. On the product side, we strengthened and expanded our leading product portfolio with new desktop, cloud and mobile offerings.

Second Quarter Operational Overview

EMEA revenue decreased 4 percent to $202 million compared to the second quarter last year as reported and was flat on a constant currency basis. Revenue in the Americas increased 2 percent to $202 million compared to the second quarter last year as reported. Revenue in Asia Pacific decreased 1 percent to $158 million compared to the second quarter last year as reported and increased 4 percent on a constant currency basis. Revenue from emerging economies decreased 2 percent to $86 million compared to the second quarter last year as reported and 1 percent on a constant currency basis. Revenue from emerging economies represented 15 percent of total revenue in the second quarter.

Revenue from the Platform Solutions and Emerging Business segment decreased 9 percent to $197 million compared to the second quarter last year. Revenue from the AEC business segment increased 9 percent to $177 million compared to the second quarter last year. Revenue from the Manufacturing business segment increased 2 percent to $144 million compared to the second quarter last year. Revenue from the Media and Entertainment business segment decreased 11 percent to $43 million compared to the second quarter last year.

Revenue from Flagship products decreased 11 percent to $289 million compared to the second quarter last year. Revenue from Suites increased 18 percent to $193 million compared to the second quarter last year. Revenue from New and Adjacent products was $80 million, and decreased 1 percent compared to the second quarter last year.

The challenging dynamics within some of the end-markets that we serve has led us to adjust our growth assumptions, said Mark Hawkins, Autodesk executive vice president and CFO. While the near-term revenue target is lower, we remain diligent about managing our spend while making essential investments to drive growth.

With the recent introduction of more flexible license and service offerings that have ratable revenue streams, such as cloud-based and rental license offerings, Autodesks business model is evolving, continued Hawkins. We are currently refining our plans around the pace and time frame for this business model transition. We look forward to providing more detail at our Investor Day event scheduled for October 2nd. As we evolve our business model, we remain committed to long-term operating margin expansion.

Business Outlook

The following statements are forward-looking statements that are based on current expectations and assumptions, and involve risks and uncertainties some of which are set forth below. Autodesks business outlook for the third quarter assumes, among other things, a continuation of the current economic environment and foreign exchange currency rate environment, and interest expense related to Autodesks $750 million debt offering in December 2012.

Third Quarter Fiscal 2014

3Q FY14 Guidance Metrics Q3 FY14 (ending October 31, 2013)

Revenue (in millions) $540-$555

EPS GAAP $0.19-$0.23

EPS Non-GAAP $0.36-$0.40

Non-GAAP earnings per diluted share exclude $0.11 related to stock-based compensation expense and $0.06 for the amortization of acquisition related intangibles.

Third quarter fiscal 2014 outlook assumes annual effective tax rates of approximately 23 percent and approximately 25 percent for GAAP and non-GAAP results, respectively. These rates do not include one-time discrete items but do reflect the recently enacted extension of the federal R&D tax credit benefit through December 31, 2013.

Full Year Fiscal 2014

Autodesk is not providing full year fiscal 2014 guidance at this time.

Earnings Conference Call and Webcast

Autodesk will host its second quarter conference call today at 5:00 p.m. ET. The live broadcast can be accessed at http://www.autodesk.com/investors. Supplemental financial information and prepared remarks for the conference call will be posted to the investor relations section of Autodesks website simultaneously with this press release.

NOTE: The prepared remarks will not be read on the conference call. The conference call will include only brief remarks followed by questions and answers.

A replay of the broadcast will be available at 7:00 pm ET at http://www.autodesk.com/investors. This replay will be maintained on Autodesks website for at least 12 months.

Safe Harbor Statement

This press relea

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